Gold on course for a weekly fall as yields rise

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Gold on course for a weekly fall as yields rise

On Friday, gold was heading for a weekly fall, as higher Treasury yields slowed the appeal of zero-yield bullion, with a stronger dollar adding more pressure.

Spot gold was down 0.4% at $1,929. By 0825 GMT, 90 per ounce was available. U.S. gold futures fell by 0.9% to $1,936.

It is the developments in the fixed income markets with yields rising that are pushing gold, said Peter Fertig, a Quantitative Commodity Research analyst.

The yield on the U.S. 10 year Treasury note went above 2.4% on Friday after dropping to a one-week low in the previous session. The opportunity cost of holding gold increases as a result of higher yields. The US dollar fell for a second straight session, making gold less appealing to the US dollar. The USD Gold is expected to end the week about 1.4% lower, having dropped earlier this week on signs of progress in talks between Russia and Ukraine.

Negotiations aimed at ending the five-week war were set to resume even as Ukraine braced for further attacks in the south and east.

A key U.S. jobs report that could help the Federal ReserveFederal Reserve decide whether to hike the interest rate by up to 50 basis-points next month is due later on Friday. In a note from Stephen Innes, managing partner at SPI Asset Management, said that USD A downside surprise on employment and earnings should not affect market rate hike pricing for 2022, with the Fed moving to inflation-fighting mode.

The idea that the U.S. economy has more underlying momentum than previously assumed would be strengthened by a beat on jobs data. Spot silver was down by 0.5% to $24.65 per ounce and is poised for a weekly dip.

Platinum rose by 0.1% to $984.56, while the price of palladium rose 0.6% to $2,274. Both metals were on course for a fourth week in a row.